COVID-19 and The CARES Act | Fora Financial Resources

COVID-19 CARES Act for Small Businesses

A comprehensive guide to The CARES Act for Small Business Owners



Through The CARES Act, the Small Business Administration (SBA) will provide financing resources to business owners experiencing economic hardships due to COVID-19. If your business is in this situation, it’s important to weigh your options now so that you don’t miss out on these affordable financing programs. Below, we’ll review the options included in The Cares Act.

The Fora Financial team will continue to monitor the COVID-19 crisis and The CARES Act and update this page with new developments.

Economic Injury Disaster Loan (EIDL)

If your business is in a declared disaster area, you can pursue an Economic Injury Disaster Loan from the SBA. These loans have a maximum amount of $2 Million, maximum term of 30 years, and can be used to pay business expenses such as fixed debts, payroll, accounts payable, rent, utilities, and other bills.

Most U.S. Small Businesses with 500 employees or less qualify for the EIDL. In addition, most individuals who operate under a sole proprietorship, with or without employees, or as an independent contractor.

Businesses that were established on January 31st, 2020 or before are eligible for this loan. It is free to apply for this loan program, and the SBA says that recipients should have funds within 2 to 3 weeks of applying. Loans are available through December 31st, 2020, but funds are limited so time is of the essence.

For a more in-depth look at the EIDL, check out our guide to the EIDL program.

Paycheck Protection Program (PPP)

This financing option provides cash flow assistance through entirely government-funded loans to employers who continue to pay their employees during the COVID-19 process. By pursuing the Paycheck Protection Program, you’ll have financing to keep your valued employees on-staff, and the SBA will forgive the loans for eight weeks.

The maximum loan amount is $10 million, depending on payroll costs. This also depends on any loans outstanding under the SBA’s Disaster Loan Program since January 31st. However, seasonal and new businesses will have payroll expenses capped at $100,000 annually per employee. The length of the PPP loan is 2 years.

Applicants must have fewer than 500 employees on-staff, but there are certain industries that can exceed this number. Per the SBA, applicants can receive within 2 to 3 weeks of applying, and loans are available through June 30th, 2020.

For a more in-depth look at the PPP, check out our guide to the PPP program.

The Small Business Debt Relief Program

This program provides financial relief to businesses through non-disaster financing, including the 7(a) loan, 504 loan, and microloan products. The SBA will cover loan payments and fees for six months.

In general, businesses must meet size standards, be based in the U.S., be able to repay the loan, and have a sound business purpose.

Depending on the type of loan you apply for, terms vary from 10 to 25 years. Currently, the amount limits are up to $50,000 for Microloans, up to $5 Million for 7(a) loans, and up to $5.5 Million for 504 loans.

To apply for this program, contact your local Small Business Development Center (SBDC) or Women’s Business Center (WCB). They’ll be able to assist you with next steps.

SBA Express Bridge Loans

The Express Bridge Loan (EBL) provides business owners that have an existing business relationship with an SBA Express Lender with financing up to $25,000. This program is designed to provide these business owners with financing quickly to bridge the gap until they can apply for and receive an SBA Economic Injury Disaster Loan.

This financing option can be used to overcome financial losses caused by COVID19. It can also be used to bridge the gap until the business owner receives an EIDL loan from the SBA.

The SBA’s underwriting process will be automated, and applicants will receive their qualification status within hours. In addition to completing the application, applicants should also submit SBA Form 1920, SBA Form 1919, and SBA Form 159.

If your business has been affected by COVID-19, you can apply for EBL loans through March 13, 2021.

The CARES Act Small Business Loan Programs At a Glance


Paycheck Protection Program (PPP) Economic Injury Disaster Loan (EIDL)
Loan Amount Up to $10 million Up to $2 Million
Loan Terms 2 years Up to 30 years
Use of Funds Payroll-related costs, mortgage interest, rent, utilities. Debt, business expenses, rent, maintain payroll, and afford production costs.
Prerequisites Most businesses with less than 500 employees Businesses with fewer than 500 employees and non-profits of any size may qualify
How to Apply Please contact an official SBA 7(a) lender. Directly through the SBA.
Fee to Apply $0 $0
Collateral Not required None for loans up to $25,000; $25K+ – blanket UCC lien against assets of the business
Personal Guarantee Not required None for loans up to $200,000; $200,000+ PG required for owners with 20%+ ownership.
Interest Rate 1% 3.75% for Small Biz
2.75% for Non-Profits
Application Deadline June 30th, 2020 December 31st, 2020 or until funds run out
Business Start Date to Qualify Business established on 2/15/2020 or before are eligible Business established on 1/31/2020 or earlier are eligible

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Other Aspects of The CARES Act:

We’ll include additional resources as they become available, so check back often:

  • Small Business Counseling: Free business counseling is available through the following organizations: Small Business Development Center (SBDC), Women’s Business Center (WC), SCORE, and Minority Business Development Agency Business Centers (MBDCs).
  • Small Business Contracting: Government contractors affected by COVID-19 will be allowed to modify contact terms and conditions and receive reimbursements during this time.
  • Small Business Tax Provisions: For businesses that have had to partially or fully suspend usual operations due to COVID-19, a refundable payroll tax credit is available. This credit can equal up to 50 percent of wages paid to certain employees during the crisis.

How Can Your Business Secure This Funding?

To learn more about these programs and start the application process, contact the SBA directly. As previously mentioned, it’s crucial to weigh your financing options now, as these programs are limited. By applying as soon as possible, you can secure necessary funding to protect your business.